medium · Private Credit underwriting-credit-analysis
A sponsor acquires a company for 7.0× trailing EBITDA of $30M using $126M in debt.
If EBITDA grows 8% annually and all free cash flow is used to pay down debt, what is the estimated cumulative debt paydown after 4 years if annual FCF averages $23M?
- $92M
- $40.8M
- $33.6M
- $126M
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